Tourism continues its record-breaking pace

Visitor arrivals and spending in Hawaii increased for the 12th straight month in May, keeping the state ahead of the pace needed to deliver its sixth consecutive year of tourism growth.

The number of arrivals increased 4.5 percent to 751,191, according to preliminary statistics released Thursday by the Hawaii Tourism Authority. Spending by these visitors increased 8.7 percent to $1.3 billion.

“It’s been a really good first five months of the year for Hawaii tourism and a much stronger start than expected,” said George Szigeti, president and CEO of the Hawaii Tourism Authority.

Through May, arrivals grew just over 4 percent to nearly 3.8 million visitors, and spending increased nearly 10 percent to $6.9 billion. That’s $618 million more in visitor spending than during the same period last year

Hawaii’s lodging industry was the biggest beneficiary of the significant spending increases that occurred through May, according to HTA data. Nearly $91 out of $203 spent by each visitor who came by air on a daily basis through May went to lodging costs, which rose nearly 10 percent from the same period in 2016. Through May, visitors by air spent nearly $42 per day on food and beverage, a category that rose 2.8 percent year-over-year. On average, visitors by air spent nearly $18 per day on activities and attractions, which rose 4.9 percent from the first five months of 2016. But shopping, Hawaii’s third-largest daily spending category, dropped 2.7 percent to $26 per day.

Joseph Toy, president and CEO of hotel consultancy Hospitality Advisors LLC, said increased lodging prices have been driven by demand, product improvements and the market mix.

“Demand has increased faster than supply. I think the high occupancy is helping to support the room rate increases,” Toy said. “Also, we’ve had a number of properties emerge from renovations with product improvements. We’re also getting higher-end customers. We’ve had better penetration into the higher-spending U.S. East and Asian markets.”

Increased consumer confidence and home prices have bolstered travel, especially in the upscale category, he said.

“Even if you aren’t making more money, you feel like you are,” Toy said.

Toy said he had anticipated a bit of a Hawaii lodging slowdown in 2017, but that so far the market looks good.

“If there’s a leveling off, I don’t think we’ll see it until 2018. We’ll know more after the summer season,” he said.

Higher costs for lodging have caused shoppers to be more focused and discerning, said Sam Shenkus, vice president and director of marketing for The Festival Cos., which manages the Royal Hawaiian Center.

“Some of our retailers are seeing shoppers come back two to three times before they buy,” Shenkus said. “There is a lot of competition for their dollars, but our outlook is still very good. Food and beverage sales are very strong, and we are continuing to make investments that raise the bar.”

Randy Baldemor, the HTA’s chief operating officer, said the spending gains partially reflect airline strategies that have increased seat opportunities for premium travelers. For example, Baldemor said Japan Airlines cut overall seats into Hawaii to invest in more business-class seating, which ultimately has attracted more premium travelers.

“These types of events are driving expenditures,” Baldemor said.

The May growth occurred despite a slight dip in seats, which fell 0.7 percent to 971,957. However, Jennifer Chun, HTA tourism research manager, said additional seats are coming to augment Hawaii tourism.

From June to August 2017, U.S. airlift to Hawaii is expected to increase 1.2 percent compared with the same period in 2016, Chun said.

“Approximately, 2.3 million air seats are bound for Hawaii from the U.S. mainland over the course of the next three months,” she said.

On Thursday, AirAsia X launched a four-times-weekly service from Kuala Lumpur, Malaysia, to Honolulu via Osaka, Japan, Chun said. All Nippon Airways, Delta Air Lines and Japan Airlines also have added additional summer service, she said.

Next year United Airlines will add 400,000 additional seats to Hawaii, Chun said.